I read your column every time and appreciate it. I consider you one of the very best market analysts.

I am in trouble. I was strongly expecting a downtrend in the stock market at the end of November (wave C-down predicted by Robert McHugh). The Dubai crisis convinced me that it had begun. At the worst moment last Friday I opened 60 short positions on the Polish stock market (December contracts), investing money from a house my father-in-law sold this Summer. I was doing fine with his money until that feral Friday (gaining about 25%.) Now stocks have risen considerably and I lost half of his money and stand to lose more, possibly all, if stocks continue to rise in December. I don’t know what to do. If I sell now with heavy losess I will save half of the capital. If I don’t sell I may recover some or all money in case of a pullback. However, if I hold the contracts and stock markets continue to rise without a major pullback, I may lose more or possibly all at the end of December when my contracts are due. What would you do?

The situation is so serious and potentially disastrous it’s making me sick with worry. This is why I summoned the courage to bother you. I hope you find time to reply. I realize that you don’t own a crystal ball and therefore I won’t hold any grudge if your advice proves incorrect. I take full responsibility for my decisions. But I’d take your opinion above my ignorance any time. I know am a fool for not placing a stop-loss and for not buying March contracts instead (I expect stocks to go down in January, but this may not do me any good, even if I am right, if I lose all capital on these December contracts.

Thank you for your work Rick, and many blessings on you and your family,

John

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I can’t understand why you would subject yourself to further risk, John. Would you rather be out of the position at this moment — or hoping desperately that things imrpove? RA

Not surprising MK Ultra might shill gold for his employer gambling on his fairly decent track record. Buy on the BRIC rumor and sell on the gold peak news.

So Gary here may be the only golden bear I know, significant in itself.

Dollar jumps on market and gold declines, with profound fundamental evidence of deflation appear overwhelming for default implosion of ALL assets, driving interest rates and the dollar higher. Unpopular facts with trailing buy and sell stops helped make good money in the past.

Goldman may be leading the way down for most assets from 193 since the Ides of October. Time will tell.

Real gold pays no interest or dividend and does entail assay, shipping and storage costs. Parabolic gold may be as significant a warning message as the negative T Bill yields last week, that the latest asset bubbles in debt and gold may be nearing an unexpected end.

Think of the giant sucking sound if $605 T of derivatives implode on $6.9 T of gold. http://www.istockanalyst.com/article/viewarticle/articleid/3644327

Any significant default of Gold ETFs or Exchange Deliveries may stop the Goldilocks mania prolonged by liquidity failures of CIT and Dubai as much as a poker game based on bluffing comes to a painful end for most participants except those that know the odds and market psychology.

We agree with Max the curtain may be rising on Act II of the credit crisis.

Russia may be buying the Loonie, but it is PPP GDP that matters. The USA is still second only to the EU, almost as big as China, Japan and India combined…

http://en.wikipedia.org/wiki/Max_Keiser

PS: Did anyone else read or see Mother Night by Vonnegut with Nick Nolte?
He plays a Hitler broadcaster passing espionage by his Berlin Broadcasts…

http://www.amazon.ca/Mother-Night-Keith-Gordon/dp/630438100X

Only 900b in tax revenue?
Of the current 3.8tr budget, about 2tr are funded, the rest is deficit.
Where does that other 1.1tr come from? Is that all payroll taxes, fees, duties, etc?

Also, not to worry about that 7% being about enough to gobble up the total tax take.
After all, that 7% would not affect current debt-interest, only the new debt (either roll-over or new deficit funding) sold when yields hit 7%.
Any of that interest at 7% would thus not be due for a whole year after the sale(s), so NO sweat, we got plenty of time!

The last 2 times the market fell hard the dollar rose. This tells me that the dollar is still the safe haven.

The real test is if/when we see a 10 to 15 percent drop in the DOW. My bet is that Gold will once again fall and the dollar rise.

Long term? I ploace my bet that deflation will win out and the dollar will actually rise against most currencies. Most do not agree with this scnario but thats my take.

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Even institutional money managers aren’t so miserably stupid as to view the dollar as a safe haven, Gary, although a perennially deaf-dumb-blind news media have sustained this crackpot idea. Far from being a safe haven, the dollar has become a carry-trade unwind, as well as a short-squeeze play against debt. RA

ps: I understand that the dollar is not YOUR safe haven, nor that of anyone other than an OPM-empowered Master of the Universe

Thanks!

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Since June, my downside target for the NYBOT Dollar Index has been 72.93. That is still my minimum downside objective and therefore a logical place for a dead-cat bounce. If the target evinces no such bounce, it will be Katy-bar-the-door time for the U.S. dollar (and the global financial system). RA

Regulators List Systemic Risk Institutions: Report
REGULATORS, RISK, SYSTEMIC RISK, BANKS, BANKING, FINANCIAL SERVICES, INSURANCE, INSURERS
Reuters
| 30 Nov 2009 | 03:52 AM ET

Thirty global financial institutions have been selected for cross-border supervision exercises by regulators, the Financial Times reported on Monday.

Compiled under the guidance of the Financial Stability Board (FSB), an international body of regulators and central bankers, the list is part of an effort to pre-empt the spread of systemic risks in the event of a future financial crisis.

Those featuring in the list will also be asked to write so-called “living wills” that outline plans to wind up banks in the aftermath of a crisis.

The FSB was established in the summer of 2009 to address the dangers posed by systemically-important, cross-border financial institutions through better supervision and co-ordination.

The list in full, as cited by the FT:

North American banks: Goldman Sachs , JP Morgan Chase , Morgan Stanley , Bank of America-Merrill Lynch , Royal Bank of Canada.

UK banks: HSBC , Barclays , Royal Bank of Scotland , Standard Chartered .

Continental European banks: UBS, Credit Suisse, Societe Generale, BNP Paribas, Santander, BBVA, Unicredit, Banca Intesa, Deutsche Bank, ING.

Japanese banks: Mizuho, Sumitomo Mitsui, Nomura, Mitsubishi UFJ.

Insurers: AXA, Aegon, Allianz, Aviva, Zurich and Swiss Re.

# Slideshow: The World’s Safest Banks

URL: http://www.cnbc.com/id/34202704/

“They really have lost their minds completely”

Oh, where to start?
Perhaps with the ever closer-to-being admitted future *deficits* of 2 trillion?
And yet, according to them, by 2019, the interest we will be paying on our debt by then will “only” be 700billion.
Let’s see, if we do 2trillion for the next three years, then scale it back to 0.8 trillion til 2019 that will leave the debt at about 23-24 trillion.
3% to be paid by treasury then?

In fact, one just has to look at the ridiculous maturity structure of the federal debt, with a current rollover of 4 years.
3trillion to be rolloed over now, plus the 1.5tr. new deficit– it will get more and more interesting!

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Total U.S. tax revenues are about $900 billion. Bill Buckler (“The Privateer”) points out that this entire sum would be consumed by interest payments alone if Treasury rates should push above 7%. Recall that Treasury rates were above 18% during Carter’s term. RA